Budgeting for a Quick Comeback!

The months leading up to a fiscal year turn can be stressful enough. In light of the current climate, healthcare organizations are faced with even more significant challenges. Any preliminary volume and staffing projections previously in place are now being cast aside and re-evaluated based on new strategies to restore financial stability. What is your organization doing to adapt the Fiscal Year 2021 Budget to mitigate the financial impact of COVID-19?

For those hospitals and health systems with a July 1st fiscal year start, it is not too late to ensure that your budget aligns with your financial goals and current operations. While a fixed budget may be in place, the focus should shift to a flex budget based on variable volumes and staffing patterns. ALTIUS has several tips for managing these critical times regardless of where your organization is in the budget process:

  • Do not ignore the value of robust benchmarks
    • Departmental benchmarks can be applied systematically to aid in the development and validation of the FY 21 Budget because they provide an acceptable range of staff hours to volume that will ensure efficiency under the current circumstances
  • Identify minimum staffing levels and do not staff below
    • It is essential to understand which departments are impacted by minimum staffing levels so that the budget and any performance goals reflect the resources needed to maintain operations safely and effectively
  • Project staffing for rebounding volumes at various levels
    • The new FY 21 Budget should include a tiered approach to volume growth and staff rehires to properly balance resources with demand and manage productivity as operations normalize. If the budget has been set based on volume assumptions, monitor progress in each department closely and adjust staffing where necessary based on actual performance
  • Cross-train staff to support in more than one area
    • Capitalize on the steps taken to cross-train individuals during the pandemic by evaluating the opportunity to continue staffing these dual roles in the future and budget for them accordingly moving forward
  • Detail a Realization Schedule for rebuilding staff
    • Create a timeline that mirrors the budget tiers for rebuilding volume and staffing to effectively communicate expectations and instill accountability
  • Recognize that specific departments will not return to the previous state
    • Identify the “new normal” and outline the impact to staffing and volume levels so that the proper resources can be allocated going forward

As your organization pivots and plans to redesign aspects of the Fiscal Year 2021 Budget, ALTIUS is ready to support your benchmarking and analytical needs. Reach out today for solutions that will solidify your financial strength and operational longevity!

Leave a Reply

Your email address will not be published. Required fields are marked *